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Organizational Culture: In Theory and Practice

Tuesday, February 21st, 2012

Articles about how your company culture and talent will be the key factors in your organization’s success, or lack thereof, seem to be everywhere.  Some of these articles highlight specific focus areas for building a culture, and others include high-level theories without application.

I recently had the opportunity to hear Diane Adams and Richard Byrd from Allscripts discuss their corporate culture at a Raleigh Chamber of Commerce program.  Diane, who is the executive vice president of culture and talent, and Richard, who is the vice president of internal communications/culture, shared both a high-level theoretical approach and more specific details about how it is applied in practice.

From 20,000 feet, the key takeaways from the presentation were:

Culture is Intentional

It’s important that you have a destination in mind and take ownership of your company culture.  Your culture should then drive measurable behaviors.

Culture First

You can’t afford to lose precious time waiting to get to your culture.  You must start now if you haven’t already.

It’s More Than Great People

You must continue to work deliberately on your culture. Hiring for cultural fit is just the start.

Inside=Outside

When your organization has a strong, positive culture with engaged employees your customers will have a great experience and your business will see the results.

Diane and Richard pointed to four key areas of focus at the application level when it comes to organizational culture:

Empowerment

Let your team members/employees own their job. When people own something, they usually treat it much differently and will go the extra mile to make it better. It’s also important to help them see how they impact the business results.

Communications

Without consistent, repetitive communication, culture is just some words put to paper.  Make sure the lines are open to two-way communication and be aware that the words you use matter.

Respect/Civility

How people treat each other is a big piece of culture.  Team members should interact in a positive manner toward each other, even when in disagreement.

Feedback/Development

Top talent wants to be in an environment where they are learning, challenged and feel like they are continuing to grow.  Recognition is also important for all employees.

Having read many of the articles and heard numerous speakers discuss culture, I think there are two clear points to be taken from the chorus:

1 – You need to focus on culture now.  If you put it off you will be looking back in six months and realize that your culture has taken on a life of its own—one that you may not like.

2 – One size does not fit all.  It’s up to you to find those things that make your organization special and to highlight them, while also determining the aspirational goals for your culture and how you are going to work toward getting there.  Sure, there may be some broad topic areas that need to be included, but the specifics are up to you.

Is your company culture what you want it to be?  What are you doing to get it there?

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Office Romance: Protect Your Company and Employees with a Strong Policy

Thursday, February 16th, 2012

With Valentine’s Day taking place earlier this week, reviewing your company’s policy on office relationships is a good idea. People spend the majority of their week working, so a workplace relationship is not an unusual phenomenon. CareerBuilder’s recent survey on love in the workplace indicates that 38 percent of employees have dated a coworker.

Realizing the potential dangers of an office relationship, such as abuse of power, favoritism and low morale, is imperative for employers that want to protect their organization and people. Banning relationships all together is not advised by many labor and employment lawyers and HR professionals.

Attorney Mark Kluger of Mandelbaum Salsburg  told Bloomberg Business Week that creating a policy that prohibits workplace romance is problematic for two reasons:

“…it sends a negative message to employees about your company’s willingness to impose itself into their personal lives. The other thing is that you don’t want to create a Romeo and Juliet situation. If there’s a policy against workplace romances, people will feel they must lie and sneak around, and that’s the last thing you want.”

Instead of forbidding workplace relationships, draft a strong policy that specifies your organization’s expectations for coworkers who date. Below are a few topics that should be addressed in your policy:

Secure the Work Environment:

Explicitly state that your company has no tolerance for and prohibits favoritism and abuse of any kind. Include information on your sexual harassment policy as well. These two details will help maintain a positive workplace environment for all employees.

Outline Consequences:

Make it clear that you take this issue seriously. Inform your workers of the consequences they’ll face if they decide to act against the established policy. Taking this step will make people less likely to break the rules. It will also show your employees that you respect their right to be safe and will punish those who don’t.

Make the Complaint Process Easy:

As an employer, you have a responsibility to your workforce to investigate each claim that implies an employee acted against policy. Develop a complaint procedure that encourages staff members to speak up if they feel like a coworker has violated their rights. Whether the claim is accurate, taking the time to investigate any suspicious activity will be advantageous if a lawsuit occurs. 

Set Ground Rules:

You can’t dictate what your employees can and can’t do outside of work, but you can make your expectations for the workplace extremely clear. You can prohibit public displays of affection, lovers’ quarrels, or anything else that can potentially make other staff members uncomfortable or distracted during workplace hours. Employees involved in a workplace relationship owe you and their coworkers professionalism while they are at work.

Your tailored policy can help you avoid a potential lawsuit if an office relationship turns for the worse, so review your policy annually to make sure it continues to fit the needs of your organization. Additionally, make sure all employees receive the policy and understand the points that are addressed.

For more information on handling office relationships or creating a workplace policy, please contact a member of CAI’s Advice and Counsel Team at 919-878-9222 or 336-668-7746.

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Learn HR Strategies to Retain Top Talent and Increase Business Success

Thursday, February 9th, 2012

Recent research indicates that more than 70 percent of American workers are disengaged with their employers. Predictions for 2012 employee trends show signs that employees will no longer tolerate being overworked and underappreciated. Top talent will seek opportunities that match their career goals and work-life balance needs. If your organization is not taking the correct steps to engage your workforce, you may see an exodus of your high-performing employees in the next year.

Ensuring that you understand and utilize employee engagement methods will help prevent your most productive workers from leaving your company. Creating a positive workplace culture is instrumental in attracting and retaining sought-after talent. A positive company culture will also help you stay strong and maintain success in situations that are tough on businesses, such as a recession.

You should make decisions on culture with a purpose and an end in mind according to Bruce Clarke, CAI’s President and CEO. The way you plan and execute your strategy for a new or improved company culture should depend on your employees, company mission statement and values, business goals and employer brand aspirations. Copying tactics used by great companies like Southwest Airlines or Zappos.com may be advantageous, but finding ways to engage your unique workforce is a more useful approach for resolving specific issues at your organization.

Jeff Tobe, an engagement strategist and a keynote speaker for the 2012 HR Management Conference, says that an engaged employee affects business results more positively than a disengaged one. Employees value their time outside of work, so organizations that acknowledge and respect this fact will be more successful in attracting and retaining top talent.

Winning cultures create environments where employees want to go to work instead of have to go to work according to business expert and a 2012 HR Management Keynote speaker, Jack Daly. He says that four factors are mandatory to ensure a positive workplace atmosphere, and they are recognition systems, communication systems, personal and professional development systems, and empowerment processes.

CAI’s 2012 HR Management Conference will provide attendees with more information and strategies for retaining high-performing workers, as well as increasing your company’s bottom line. Join more than 300 HR professionals and company leaders at the 2012 conference scheduled for February 21 and February 22 at the McKimmon Center in Raleigh.  You can register today here: www.capital.org/hrconf. Check out the HR Management Conference website for a full agenda with speaker information and presentation topics.

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10 Resources for Finding Top Talent for Your Company

Tuesday, February 7th, 2012

Multiple factors help a business reach success, but hiring high-performing individuals is a critical component. Knowing the best places to reach qualified candidates will help you secure top talent for your organization. Even when you aren’t hiring, building a pool of great applicants before your search is beneficial for your company’s time and resources. The economy is slowly changing and unemployed workers and disengaged employees with attractive soft skills and key industry knowledge will search for opportunities that fulfill their needs. Use the ten resources below to help job seekers find your organization:

Networking Events:

  • Talented job seekers use networking events to show off their best assets to potential employers. Inform attendees that you are hiring so they know to ask for more information if they are interested.

Company Events:

  • You can also invite job seekers to an open house at your office if you are hiring for more than one position. Use these events to pitch your company’s best selling points.

Your Network

  • Use the relationships that you have formed in your career to navigate you to top talent. Your friends and business colleagues can help guide you to the right candidate.

Create a Great Culture:

  • Foster a positive environment for your employees to keep them engaged and satisfied with their jobs. Happy employees will share their job experience with others, creating a buzz that your company is an employer of choice.

Social Networks:

  • Job seekers are using the internet to find positions. Make sure your company is using social media to highlight job openings and the workplace culture it provides.

Employee Referrals:

  • Inform your employees of your company’s openings, and ask them if they know of any qualified applicants. They are great sources for recommending people who share their same talents, such as their friends or college classmates.

Industry Referrals:

  • If your organization is a member of a specialty or industry group, seek help from the other company group members. Your peers could provide you with a candidate that matches your needs perfectly.

Universities:

  • Students are great prospects for new hires because they are eager to work and learn once they graduate. Participate in career fairs and share your open positions with the university’s career service department to inform students of the opportunities you offer.

Government Programs:

  • The government offers various programs for employers that are interested in individuals from specific categories, like veterans. Completing paperwork correctly and staying compliant with state and federal regulations is mandatory when using government recruiting options.

Help Them Navigate:

  • Make it easy for job seekers to learn about your organization and its open positions. Allowing candidates to call your office to learn about an opportunity or submit a resume online are two ways to help them connect with your company.

Combined, these resources should help you find plenty of suitable applicants for your company. Remember that convincing job seekers to join your organization will take effort on your part. Make sure your employer brand conveys the right message you want job seekers to receive. Provide candidates with examples of the benefits that you provide to your employees. Reach out to your staff and ask them the reasons they enjoy working at your organization to ensure you’re highlighting your company’s strongest features.

For more information and strategies for locating top talent, please call a member of CAI’s Advice and Counsel Team at 919-878-9222 or 336-668-7746.

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Simple Steps to Raise Employee Morale at Your Workplace

Thursday, February 2nd, 2012

Disengaged employees are detrimental to your business, and the current state of the economy has increased the number of workers who are no longer engaged. Little to no salary increases, poor benefits options and juggling more with less can cause your high performers to become frustrated and ultimately disengaged. Today’s economic climate might make them afraid to leave your organization right now, but as conditions improve, they’ll be the first to leave you for a competitor that offers them a better work environment.

Before your best talent walks out the door, recognize the impact that high employee morale can have on your organization. Recent research shows that workplaces that boast high morale are more productive and have higher retention rates than companies that don’t. Without proper planning to increase company morale, employees will respond by producing poor quality work, being absent often, wasting time and resources, and leaving your organization. The cost of replacing and training talent is expensive but can be avoided if your organization makes an effort to improve morale.

The five tips featured below are inexpensive ways to create a positive atmosphere for your workforce. By implementing some or all of the tips, you will see the overall morale at your company increase:

1. Remember the Golden Rule

Treat others how you would like to be treated. Taking the time to show your employees respect and empathy will encourage them to reciprocate your actions.

2. Say “Please” and “Thank You”

People forget their manners when work gets busy and stressful, but these two phrases show your appreciation for the work that your employees produce. Say them often to keep your workforce happy.

3. Delegate

Employees stay at organizations that trust them to complete projects with autonomy. Empower your employees by giving them responsibility and trusting them to complete their assignments. Unless they perform poorly, do not micromanage your direct reports.

4. Recognize and Praise

Workers will show loyalty when they feel valued and are recognized for the contributions they make. So, frequently commend your workers when they produce great work or go above and beyond for your organization.

5. Incorporate Fun

Being serious all of the time drains productivity. Schedule group activities that allow your employees to loosen up and take a break from their routine assignments. Casual Friday and team-building exercises are two suggestions.

High employee morale is necessary for attracting and retaining top-tier talent. For additional employee engagement strategies, please contact a member of CAI’s Advice and Counsel Team at 919-878-9222 or 336-668-7746.

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Ongoing Training Helps Managers Reach Success

Tuesday, January 31st, 2012

Bruce Clarke, CAI’s CEO, discusses the importance of managerial training in his most recent edition of his News and Observer column, “The View from HR.” In his column, Bruce informs his readers that less than half of the companies he surveyed had no budget for managerial training. Bruce argues that without training, managers are unable to improve their soft skills, which are necessary to lead an organization. Communicating effectively, working well in teams, empathizing with colleagues and keeping calm in stressful situations are examples of soft skills that lead businesses to success.

Making sure your managers are adequately trained to handle their projects and supervise people is important no matter if your budget is large or extremely limited. Considering multiple budgets, here are a few ways to train your managers:

Training Classes

  • Employers’ associations and similar organizations offer companies several training options for their managers. While training programs range in price and length, they offer participants valuable information and leadership practices to take away and use for supervising their staff members.

Webinars

  • In addition to training classes, managers can learn key concepts from webinars. Many times managers want to attend training classes, but their demanding schedules make leaving the office hard. Webinars allow managers to sharpen their skills and improve their leadership without leaving their desks.

Reading

  • An inexpensive way for managers to advance their skills is to invest in managerial literature. Many non-fiction books offer managers solutions for solving people management issues or ensuring the success of a project. These books are often available at public libraries.  In addition, reading blogs like this one that share tips on increasing retention and company morale is an effective way for managers to strengthen their leadership qualities.

Mentors

  • A meticulously organized company mentor plan is another budget-friendly method to train your managers. To make this program successful, match new managers with experienced and high-performing managers. The seasoned managers will have a wealth of knowledge and experiences to help their newer colleagues tackle and conquer tough workplace issues. These employee pairs should meet regularly for an extended period of time to be effective.

Managers juggle many tasks and are responsible for multiple people. For these reasons, it’s important to ensure that they receive proper training. Giving them several opportunities to improve their soft skills will help your company see more success. If you’re interested in CAI’s training courses, please contact a member of CAI’s Learning and Development Team at 919-878-9222 or 336-668-7746.

Photo Source: Ryan Holst

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Four Ways to Build and Sustain Trust in Your Workplace

Thursday, January 26th, 2012

Are you constantly checking and rechecking the work completed by your employees? Does your boss often say phrases like, “it’s my way or the highway” or “that’s not the way you should do it”? Have you noticed your staff members watching their backs or withholding information from their coworkers? Do people consistently give you instructions that are contradictory? If so, your organization is suffering from a lack of workplace trust.

Building trust in an organization is no easy feat. Time, dedication and care are essential for keeping trust nurtured and sustained. Trust is a fundamental value that all companies should practice because it improves almost every business facet, including retention, morale, communication, customer service and productivity. Employers that focus on trust exhibit confidence in the decisions their workers make, have more collaborative workflows and keep employee motivation high.

Because trust starts at the top, ensure that management is included in your efforts to improve trust at your organization. Employees will quickly follow suit when management is leading the way. Incorporate the tips below into your workplace processes and see the level of trust increase significantly.

1.  Establish Values

Use your company’s mission and values extensively. All employees should be aware of what they are, and they should all strive to uphold them. Revisit your mission and values during staff meetings and post them in different areas in your workplace. Your business changes over time, so make sure to continually review, revise and align your mission and values with the business results you want to produce and the employer brand you want to exude. Ask for input from your staff members when reviewing and revising.

2.  Communicate Openly

Being transparent in your business practices will gain you the trust of your employees. Don’t disseminate information to only a privileged few (unless it’s confidential) because outcries of favoritism will inevitably ensue. Instead, frequently share information with all staff members. Employees don’t like being in the dark, and they will become more engaged the more you communicate openly with them. Additionally, don’t shy away from telling staff members bad news. Even though the news may not be desirable, they will respect the fact that you gave them the truth.

3.  Respect all Employees

Just like trust, respect is earned. You can’t expect your team members to follow your lead if you don’t respect them or the contributions they make to your organization. There are a number of ways in which you can show your employees that you respect them. Don’t micromanage them and obsessively recheck over their projects. Give them clear expectations and autonomy, and they will produce good work. Show them that you are interested in their lives by getting to know them. This can include learning their children’s names or the sports team they follow. Ask for their opinions on business initiatives, and stay informed about their personal short-term and long-term goals. No matter if they are full-time, part-time or temporary employees, recognize the work they perform by thanking and praising them often. Trust is easier to maintain when each of your team members feels valued and supported by the company.

4.  Be Human

Too many managers want to appear perfect, but the ones who resonate best with their employees acknowledge their mistakes and confess when they don’t know an answer. Yes, admitting imperfection will make you more vulnerable, but it will make you more human and that’s a characteristic that employees want in their managers. Let your team members know that mistakes can happen, but they must make a commitment to learn from them. Another way to show empathy is to respect your employees’ work/life balance. Unless they give you a reason to doubt them, trust that they will complete their assignments, and allow them to enjoy their lives outside of work. Be loyal to your employees and they will reciprocate.

You can’t establish workplace trust overnight, but you can destroy it in a matter of seconds. A continuous effort to show employees the importance of trust is necessary to keep it alive at your organization. Integrate trust in your values, performance appraisals, onboarding practices and other workplace activities. Companies that rate trust highly are more successful than companies that don’t. For more information on building trust at your organization, please contact a member of CAI’s Advice and Counsel Team at 919-878-9222 or 336-668-7746.

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Stop Poor Employee Behavior from Damaging Your Workplace

Tuesday, January 24th, 2012

“No one has ever been fired for a bad attitude. Sure, attitude may be the reason given, but the real reason was poor behavior. We cannot know another person’s attitude (whatever that is) but you can observe and act on behaviors,” Bruce Clarke, CAI’s president and CEO, says in the latest edition of his News & Observer column, “The View from HR.”

Some managers are quick to say that their poor performing employees have bad attitudes. However, if they observe the actions of their poor performers and offer suggestions for improvement, managers can turn employees with perceived bad attitudes into productive workers who positively affect the company’s bottom line.

Knowing how to correctly handle an employee with a behavior problem is invaluable for employers.  Threatening to fire or demote an employee the next time she displays poor behavior will do little to help improve her work performance. Use the information below to help resolve behavioral issues at your company:

Explain

Use specific examples of poor performance that you have witnessed when addressing these employees. Exaggeration and hearsay from others is not helpful and may cause employees to hold resentment or perform even worse. Communicate effectively by telling your poor performer what you expect from him and what the consequences are for not meeting expectations. Doing this gives him an opportunity to improve and also allows you to check his progress to see if further action is needed.

Retrain

Inadequate training can be the culprit of problem performance at your organization. Talk with your employees to make sure they are informed about the skills and experience needed for their positions. If poor training is the reason, retrain them correctly and give them time to adjust to their updated roles. Sometimes analyzing training reveals that an employee is actually not the best fit for her job. If this occurs, see if she has tasks that you can give to another employee or if you can reassign her to a new position.

Monitor

Employees with unsuitable workplace behavior should have increased supervision. Micromanaging is not necessary, but checking in with them frequently will help you determine if they can improve or if you need to let them go. Once you and your poor performer agree on an improvement plan, set up a weekly meeting to assess his progress and uncover any obstacles that he may be facing. Reward employees or take further disciplinary action based on the information you learn from these meetings. Keep these meetings documented so you and the employee have a record of his workplace behavior. Documenting these meetings also will be legally helpful if terminating an employee becomes an option.

Be swift when dealing with employees who display poor workplace behavior. Addressing the issue quickly will show your intolerance for unsatisfactory performance. Failing to do so will lower your team’s morale because productive staff members will be responsible for carrying the weight of their less productive colleagues. You are also in danger of wasting time, energy, resources and money when you accept poor employee performance. Call CAI’s Advice and Counsel Team at 919-878-9222 or 336-668-7746 for additional guidance on performance management issues.

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America is Stressed: Five Tips to Help Your Employees Prevent the Effects of Workplace Stress

Thursday, January 19th, 2012

The American Psychological Association (APA) released the results of its annual Stress in America survey on January 11, 2012.  More than 1,200 adults, aged 18 and older, participated in the survey that was conducted between August 11 and September 6 of last year.

In describing its findings from the survey, APA suggests that America is on the verge of a public health crisis due to stress:

“Participants’ responses have revealed high stress levels, reliance on unhealthy behaviors to manage stress and alarming physical health consequences of stress — a combination that suggests the nation is on the verge of a stress-induced public health crisis.”

As an employer, it is important to know that 70 percent of survey respondents cited work as one of their top stressors. The survey reveals that people understand the effects that stress can have on their health, but they are not taking adequate steps to prevent stress or manage it well, which causes them to experience symptoms, such as irritability, anger, fatigue, and lack of interest or motivation.

Employees who have high levels of stress struggle to perform at their best. For your company, this means less quality work, more errors, decreased morale, poor customer service and increased absenteeism if you decide to ignore the presence of stress in your workplace.

Our December post on stress offered tips on how you can help your employees maintain their stress levels. The tips below offer your employees tactics that they can utilize on their own to manage stress. Share and review the following with your workforce:

Press Pause

Many people experience stress because they regularly work up to their breaking points. Approaching work in that manner causes high anxiety and frequent fatigue, and completed products from this method are generally less than stellar. Avoid this behavior by taking breaks when necessary. Walking away from an overwhelming project for 15 minutes can help you calm down and return to work with a clear mind that is ready to focus.   

Lean on Colleagues

Do not be afraid to speak up when your workload is greater than you can handle. Companies who value teamwork are successful, so reach out to you coworker to see if he can spare ten minutes to help you review a document or complete a task. If help from your coworkers does not lighten your load, talk to your manager to see if she can help you create a system or action plan to complete your tasks.

Utilize Flexibility

More employers are offering their workforces flexibility around their schedules. With family duties and responsibilities not related to work, life can get stressful trying to balance it all. If you cannot afford a babysitter but need someone to watch your children after school, ask your manager if you can work at home for part of the day. If rush hour traffic lengthens your commute time or guzzles up your gas, ask if you can adjust your start time and end time. Show your appreciation for workplace flexibility by not taking advantage of the system and completing work during your redesigned schedule.    

Manage Time Effectively

Fifty-six percent of the survey participants believe that managing their time better will help them manage their stress. Time management is critical when working to complete several projects, but people who are stressed often spend time worrying about how they will finish their work, which leaves them with more frustration and less time to complete their projects. Stop this cycle by creating a list of the tasks that you need to get done. Prioritize the list by importance and deadline, and work hard to cross each item off. You can also break your long list into daily lists and indicate the tasks you wish to complete for each day of the week.

Be Healthy

APA’s survey revealed that participants ranked eating well and exercising at the bottom of the list when comparing factors that create a healthy lifestyle. Practicing good nutrition and fitness will immediately cause stress levels to go down. Healthy food provides your body with energy so you can stay alert for eight hours at work. Exercising multiple times per week gives you energy to focus and releases endorphins to help you stay positive. Sleep is also essential for battling stress. Getting at least seven hours of uninterrupted sleep will help you recharge and feel refreshed for your next day of work.

According to the Stress in America survey, respondents have consistently listed work as one of their top stressors for the past five years. Be aware that this trend will likely continue for the next five years, so help your employees handle their stress to avoid burn out and achieve success for themselves and the organization. For more strategies on combating employee stress, please contact a member of CAI’s Advice and Counsel Team at 919-878-9222 or 336-668-7746.

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Health Savings Accounts – 3 Situations Human Resources Professionals Should Know

Tuesday, January 17th, 2012

The post below is a guest blog from Dax Hill who serves as the Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.

So, you’ve just gotten through your benefits open enrollment and you signed up for your company’s health savings account (HSA). You probably decided to take part because you know about the triple tax savings advantages of HSAs:

  1. Your money goes in tax free
  2. It grows tax free and
  3. It comes out tax free (when used for qualified medical expenses)

 Ultimately, most people who enroll in an HSA understand the basics:

  1. An HSA is used in conjunction with a High Deductible Health Plan (HDHP).
  2.  An HDHP is a medical plan that has a high deductible that you must pay fully before the insurance company pays its first dollar of coverage.
  3. For an individual, the maximum amount you can contribute to an HSA is $3,100 for 2012.
  4. For more than one covered life, the maximum HSA contribution amount is $6,250 this year.
  5. The tax-free money you deposit into the HSA must be used to reimburse qualified medical expenses.

That’s pretty straightforward. But, as an HR professional, you may find yourself in one of the following situations where the basics simply aren’t enough.

Here are 3 “what if” scenarios that might not have been covered during your enrollment:

1)“I am covered under a High Deductible Health Plan (HDHP) with employee plus spouse coverage.  My spouse is also covered under a PPO plan (not a HDHP).  How much can I contribute to my 2012 HSA?”

In this scenario, the individual may contribute the $6,250 tax free.  The contribution amount is based on the coverage election (employee plus spouse), even though the spouse has non- HDHP coverage. 

2) “I am covered under an HDHP and my husband is covered under Medicare. Can my spouse be covered under my HDHP?  And, if so, can I can use my HSA to reimburse medical expenses for my spouse?” 

In this situation, the individual spouse can participate in the HDHP.  In addition: 

For Medicare premiums:  The HSA can reimburse Medicare premiums if the account holder is 65 or older, but cannot be used to reimburse Medicare supplement policy premiums.  So, the employee could use her HSA money to reimburse for her spouse’s Medicare premiums as long as the employee is age 65 or older.  Otherwise, the Medicare premiums cannot be reimbursed tax-free.

Other Section 213(d) qualified expenses:  The employee can reimburse her spouse’s qualified medical expenses even if the spouse has Medicare, provided that the expense has not already been reimbursed by Medicare or other insurance.  So, once Medicare pays the expense, any remaining portion unpaid could be reimbursed by the HSA.  

3)“Can I use my HSA account for my children if they are not covered under my HDHP Plan?”

Yes, you can reimburse the children’s qualified medical expenses provided that the children are Section 152 tax dependents and the expense has not been reimbursed by other insurance.  So, once the insurance policy pays the expense, any remaining portion unpaid could be reimbursed by the HSA. 

A section 152 tax dependent for a child is generally defined as a child who is under the age of 19 at the end of the tax year, or under the age of 24 if a full-time student for at least five months of the year. In addition, the dependent could be permanently and totally disabled at any time during the year and qualify under section 152.

Confusing tax codes, contribution limits and other factors can sometimes make simple concepts more difficult to understand. What questions have you had regarding your employer’s benefits plans?

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